coal price fall - india's renewed interest , page-16

http://www.businessday.co.za/articles/Content.aspx?id=133670

SA needs another coal port, says McCloskey
A difficult year for coal users where new tenders might not get supplied
TIM COHEN
Published: 2011/02/08 07:24:18 AM

SA NEEDS to consider building a new rail line and a new port for coal exports if it intends to stay competitive, coal expert Gerard McCloskey, MD of the McCloskey Group, told the mining conference in Cape Town.

"Coal is leaving SA behind," Mr McCloskey said, as part of a bullish presentation on the future of metallurgical and steam coal.

He said although SA was congratulating itself on expanding capacity at the Richards Bay Coal Terminal to 91-million tons a year, many other countries were thinking bigger. "Things are happening at a different pace elsewhere," he said.

Part of the problem was SA?s "arthritic infrastructural development". He said rail operator Transnet only had the capacity to carry about 65-million tons to the Richards Bay terminal.

This loss of position would be all the more galling if SA?s neighbours surged into life, as they were threatening to do.

A whole new industry was being developed in Mozambique, Botswana was searching for routes to the coast and "Zimbabwe awaits a rebirth", he said.

Mr McCloskey said SA should appoint a coal "czar" to encourage development of the industry.

The demand side of the industry looked strong even before the floods in Australia. SA had already begun to capitalise on the shift to Asian demand. "One in three ships that goes out of Richards Bay now heads for India," he said.

Coal consumers were worried about long-term supply, with many steel companies extending interests in the coal industry.

At the same time, there was likely to be a rush of public offerings over the next few years, possibly including Indian company Sail and Swiss company Glencore, he said.

This year would be difficult for coal consumers. While many that had long-term contracts would be supplied, "anyone who is tendering for coal may not get their contracts filled", Mr McCloskey said.

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